Filing identity and reporting period
The supplied filing is Bear Lake Recreation, Inc.’s Form 10-K for the fiscal year ended June 30, 2016, not a Modular Medical, Inc. filing or a 2015 Q4 report. The source identifies Bear Lake as a shell company seeking an acquisition or merger; it reports no substantive business operations since 2002.
Financial performance and position
| Metric | FY ended June 30, 2016 | FY ended June 30, 2015 |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expenses | $13,163 | $16,115 |
| Related-party imputed interest expense | $17,921 | $14,879 |
| Net loss | $31,084 | $30,994 |
| Basic and diluted loss per share | $0.02 | $0.02 |
| Operating cash flow | $0 | $0 |
At June 30, 2016, the company reported no assets or cash, current liabilities of $193,763, and a stockholders’ deficit of $193,763. Liabilities comprised a $131,092 unsecured related-party payable due on demand and $62,671 accrued related-party interest. The comparable 2015 balance sheet showed $2,500 of prepaid expenses, $165,179 of liabilities, and a $162,679 stockholders’ deficit. Margins are not meaningful because there was no revenue.
Changes versus the prior year
Net loss increased slightly, by $90, from $30,994 to $31,084. The filing attributes the increase to imputed interest on the related-party loan. General and administrative expenses declined by $2,952, while interest expense increased by $3,042. The related-party payable rose by $10,663, and accrued interest rose by $17,921. Cash remained at zero; expenses were funded or covered through shareholder advances and accrued interest.
Outlook, risks, and unusual items
Management plans to identify a business or industry, adopt a business plan, and pursue operations through funding or acquisition of an operating business. No target or definitive merger plan had been identified as of the report. Due diligence and legal costs for evaluating a potential venture were estimated at $10,000–$25,000; funding might depend on management loans or private offerings, neither assured.
The auditor and management disclosed substantial doubt about the company’s ability to continue as a going concern, citing recurring losses, negative working capital, and no revenue. Management’s plan is to find a well-capitalized merger candidate; the financial statements include no adjustments for the outcome of this uncertainty. Other notable risks include no cash reserves, a loan payable on demand, no established trading market, shell-company resale restrictions, and potential substantial dilution in an acquisition (the filing says an issuance could reach 95% of post-transaction voting securities). Management reported effective disclosure controls and internal control over financial reporting; the auditor did not attest to internal-control effectiveness.
Key facts for investors to verify
- Confirm the filing issuer and period: the provided document is Bear Lake Recreation, Inc., FY ended June 30, 2016, and does not match the request’s company or period.
- Review the audited financial statements and going-concern disclosures, including the $193,763 current-liability balance and zero assets.
- Verify the terms, holder, and repayment status of the $131,092 related-party payable and the treatment of $62,671 accrued imputed interest.
- Check whether the company subsequently identified or completed an acquisition, obtained financing, or changed its shell-company status.
- Consider that the filing reports no established trading market and cautions that a transaction could materially dilute existing shareholders.